Meanwhile, India's industrial output rose a stronger-than-expected 2.7 percent in March from a year earlier, according to separate government data.

COMMENTS

HITESH JAIN, SENIOR ANALYST, IIFL WEALTH MANAGEMENT

"Core inflation IS estimated at about 3.3 percent to 3.4 percent. RBI is basically being more prudent than hawkish about inflation.

"Headline inflation can average to about 4.4 percent in the first half of this year, and I think RBI will maintain a status quo on their policy with no rate hike expected at least in this calendar year."

ANJALI VERMA, ECONOMIST, PHILLIPCAPITAL INDIA

"It is slightly below expectations: 3.15 percent is what I was anticipating.

"For the first half we expect the numbers to be fairly below RBI's trajectory. However, in the second half it will be nearing 5 percent, which is in line with RBI's trajectory and therefore a rate cut is not anticipated."

"For the year as a whole, we believe that inflation would stay more or less under control. We believe an average inflation of 4.5 - 5 percent for the year as a whole is something we are pencilling in."

"From a policy perspective, there is no dire need for RBI to raise rates, and rates would therefore stay on hold. At least for the next few months RBI will not raise rates, base effect is favourable and inflation would stay benign.

"Inflation would start moving up only in second half of the year, and for the year as a whole, we think it would be under manageable levels."

ADITI NAYAR, ECONOMIST, ICRA

"CPI at 2.99 percent is a very positive surprise and well below expectations. But as of now, I think given the GST-related uncertainty, I don't that there will be a rate cut in the next policy."

TUSHAR ARORA, SENIOR ECONOMIST, HDFC BANK

"Inflation is expected to be moderate in April, May, June.

Despite subdued expectations in the near-term, today's print was better than expectations and could lead to a bit of buying in the bond market.

"RBI is mainly concerned about the second half of the year.

"We're expecting April - June to be subdued. July, August inflation could inch up towards 4-5 percent. Near-term trajectory isn't something RBI is worried about.

"We are expecting a rate hike by the end of this financial year."

RUPA REGE NITSURE, GROUP CHIEF ECONOMIST, L&T FINANCE HOLDINGS

"It's the lowest (CPI) in last several months, allaying fears that inflationary risks are imminent.

"Given the fragile nature of growth, there is a strong reason why RBI should return its stance to accommodative rather than the current neutral. This is absolutely needed to lower the costs of borrowing."